3. VARIABLE-RATESTATEGASTAXES
3
General
sales tax
applies
to motor
fuel
Motor fuel tax
calculated by
percentage
of gas price
in addition to
flat excise tax
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
x
X
X
x
X
X
X
X
x
X
X
X
X
X
x
X
X
X
X
X
X
X
X
X
X
X
x
x
X
X
X
X
x
X
X
X
x
X
X
X
Motor
fuel tax
calculated
by percent-
age of gas
price
Indexed
to
Consumer
Price
Index and/
or CAFE
Ceiling FloorFrequency Rate is Updated
Annual Six
months
Two
Years
Monthly Quarterly
19 states and the District of Columbia have a variable-rate state gas tax.
Breakdown of variable-rate state gas taxes
* Legislation approved for a future variable-rate tax.
California
Connecticut
DC
Florida
Georgia
Hawaii
Illinois
Indiana
Kentucky
Maryland
Michigan*
Nebraska
New York
North Carolina*
Pennsylvania*
Rhode Island
Vermont
Virginia
West Virginia
Utah*
4. VARIABLE-RATESTATEGASTAXES
4
CALIFORNIA
The “Fuel Tax Swap” of 2010 resulted in an “adjustable” gas tax, comprised of a cents-per-gallon base
state excise tax plus a 2.25 percent sales tax on motor fuel purchases (reduced from the state’s 6 per-
cent general sales tax). To ensure the sales tax percentage on motor fuel does not affect overall cost
of taxes paid at the pump when compared to the previous tax structure, the state’s excise tax on fuel
is adjusted annually so that any change in the variable-rate percentage is revenue neutral.
• Category: Wholesale Tax in Addition to Flat Excise Tax
• Statute: Cal. Revenue & Taxation Code §7360
• Legislation: Assembly Bill x8-6 (Chapter 11, Statutes of 2010), Senate Bill 70 (Chapter 9,
Statutes of 2010), and Assembly Bill 105 (Chapter 6, Statutes of 2011)
• Date: July 1, 2010
• Frequency: Annual
• Limits: None found.
• Uses: Transportation Fund
• Additional Taxes:
• Underground storage fee (currently 1.4 cents-per-gallon);
• Local sales tax measures.
As shown in the graph below, changes in California’s gas prices reflects the trends in the U.S. average
price of gasoline. This trend is apparent before and after gas tax legislation was enacted in 2010.
Source: U.S. Energy Information Administration
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
California
and
U.S.
Average
Weekly
Retail
Regular
Gasoline
Prices
1/3/2005-‐1/26/2015
U.S.
average
California
5. VARIABLE-RATESTATEGASTAXES
5
CONNECTICUT DISTRICT OF COLUMBIA
Connecticut’s state gas tax is composed of two
separate taxes: a 25 cents-per-gallon flat excise
tax and a “petroleum gross receipts earning
(PGRE) tax” of 8.1 percent (determined July 2013)
on the wholesale level to gasoline and a variety
of petroleum products (excluding heating oil).
• Category: Wholesale Tax in Addition to Flat
Excise Tax
• Statute: Conn. Title 12, Chapter 227 Sale of
Petroleum Products Gross Earnings Tax,
§12-587
• Date: July 1, 1980 (last raised 2005)
• Frequency: Annual
• Limits: PGRE tax is capped at $3 per gallon.
• Uses: Gross receipts tax deposited into the
General Fund and transferred to the Special
Transportation Fund.
Eight percent tax on the wholesale price of
gasoline.
• Category: States where gas tax is calculated
by average wholesale price
• Statute: DC § 47–2301
Legislation: Fiscal Year 2014 Budget
Support Act of 2013 (search: B20-0199)
• Date: October 1, 2013
• Frequency: Every six months.
• Limits: The average wholesale price of motor
fuel cannot be less than $2.94. It also cannot
fluctuate by more than 10 percent from the
average wholesale price of motor fuel from
the previous six months.
• Uses: All revenue deposited into the Highway
Trust Fund.
6. VARIABLE-RATESTATEGASTAXES
6
FLORIDA
A fuel sales tax is adjusted to the percentage change of the CPI (as issued by the Department of Labor).
• Category: Indexed to CPI
• Statute: Fla. Stat. Ann. §206.41
• Date: January 1992
• Frequency: Annual
• Limits: Floor of 6.9 cents-per-gallon
• Uses: Transportation [with diversion to Agriculture Emergency Eradication Trust Fund
(0.65 percent); General Revenue Fund (7.3 percent); Deptartment of Environmental Protection-
$6.3 million for aquatic plant management/ $2.5 million for Fish and Wildlife, Marine Resources,
Conservation Trust Fund.]
• Additional Taxes:
• Local government flat excise tax: 3 cents-per-gallon to counties, 1 cent-per-gallon to municipalities;
• Inspection fee;
• Local option fuel tax;
• State Comprehensive Enhanced Transportation System tax (indexed to inflation).
As shown in the graph below, changes in Florida’s gas prices reflects the trends in the U.S. average
price of gasoline.
Source: U.S. Energy Information Administration
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Florida
and
U.S.
Average
Weekly
Retail
Regular
Gasoline
Prices
1/3/2005-‐1/26/2015
U.S.
average
Florida
7. VARIABLE-RATESTATEGASTAXES
7
GEORGIA HAWAII
26 cents-per-gallon state gas tax, indexed to both
the Corporate Average Fuel Economy (CAFE) and
the Consumer Price Index (the latter of which will
sunset after July 1, 2018).
• Category: Indexed to CPI and CAFE
• Statute: O.C.G.A § 48-9-3 (Excise Tax) &
O.C.G.A. § 48-9-14 (State and Local sales tax)
• Frequency: Every six months, based off of
average wholesale prices.
• Limits: None found.
• Uses: Transportation
• Additional taxes: Special purpose local op-
tion sales tax (capped at $3 per gallon and
used solely for transportation purposes)
and a local government sales tax of up to 1
percent.
• Notes: 2015 legislation adjusted the new flat
excise tax of 26 cents-per-gallon to the fuel
efficiency changes published in the United
States Department of Energy Fuel Economy
Guide, and index it to the Consumer Price
Index (CPI from July 1, 2016 until July 1, 2018).
Motor fuel has a 4 percent tax on distributors
(called the General Excise Tax), which applies to
all goods and services, including motor fuels.
• Category: General Sales Tax Applies to Motor
Fuel
• Statute: Hawaii Rev. Stat. §243, Hawaii Rev.
Stat. §248-8 & Hawaii Rev. Stat. §249
• Limits: None found.
• Uses:
• General Excise Tax is deposited to the
state’s general fund.
• County tax in Honolulu, Maui and Kauai
goes towards mass transit.
• Other county taxes are deposited in the
state highway fund.
• Additional taxes:
• County taxes (revenues from the 0.5
percent Honolulu county surcharge are
dedicated to rail mass transit).
• 0.1 cent-per-gallon environmental
response tax.
8. VARIABLE-RATESTATEGASTAXES
8
ILLINOIS INDIANA
6.25 percent statewide general sales tax.
• Category: General Sales Tax Applies to Motor
Fuel
• Statute: Ill. Stat. ch. 30, §740, Ill. Stat. ch. 35,
§105, Ill. Stat. ch. 70, §3615
• Frequency: Annual
• Limits: None found.
• Uses:
• 80 percent (5 percent of the tax) is diverted
to the state, and is then directed to
various transportation funds, including the
Downstate Public Transportation Fund and
the Regional Transportation Authority.
• 20 percent (1.25 percent of the tax) goes
to the State and Local Sales Tax Reform
Fund.
• Additional taxes:
• Local sales tax may be applied by any city
over 100,000; can vary between 6.25-10.5
percent.
• 1.1 cents-per-gallon for underground
storage tank fund.
Seven percent gasoline use tax rate (charged in
addition to the state’s flat excise gas tax of 18
cents-per-gallon), calculated by multiplying the
statewide average retail price per gallon of the
previous month (provided by Oil Price Informa-
tion Service) by 7 percent, and then rounding to
the nearest one-tenth of 1 cent. Tax is collected
when a qualified gasoline distributor sells to
a nonqualified distributor, and the tax is then
included in gas price at the pump.
• Category: Wholesale Tax in Addition to Flat
Excise Tax
• Statute: Ind. Code Ann. §6-2.5-7, §6-6-1.1,
Ind. Code 6-2.5-3.5 & Ind. Code 6-2.5-10-1
• Legislation: Senate Bill 479 (2013)
• Date: July 1, 2014
• Frequency: Monthly
• Limits: None found.
• Uses: As with the general state sales tax, the
gasoline use sales tax is deposited into the
state’s general fund. Of all revenue in the
state general fund:
• One percent is deposited into the state’s
motor vehicle highway account;
• 0.029 percent is deposited into the
industrial rail service fund; and
• 0.123 percent is deposited into the
commuter rail service fund.
• Additional taxes: One cent-per-gallon oil
inspection fee.
9. VARIABLE-RATESTATEGASTAXES
9
KENTUCKY MARYLAND
Variable excise tax of 9 percent of the average
wholesale price of gas.
• Category: Adjusts based on wholesale price
of gasoline
• Statute: Ky. Revised Statutes, 1980: KRS
138.220
• Date: July 1, 1980
• Frequency: Annual
• Limits: This rate cannot increase or decrease
more than 10 percent per year from the last
quarter of the previous fiscal year, and can-
not collect less than 26 cents-per-gallon.
• Uses: State road fund.
• Additional taxes: In addition, Kentucky
collects:
• A fixed “supplemental highway user motor
fuel tax” of 5 cents-per-gallon;
• Two cents-per-gallon for “special fuels”
such as diesel; and
• Underground Storage Tank cleanup fee of
1.4 cents-per-gallon.
• Notes: March 2015 legislation altered the
variable-rate state gas tax. From July 2015
through June 2016, the average wholesale
price of gasoline will be set at the new floor
determined by the legislature, $2.177 per
gallon. Beginning July 2016, the average
wholesale price of gasoline will be calculated
annually.
The state gas tax is comprised of two parts: an
excise gas tax indexed to CPI in order to adjust
for inflation; and a 3 percent state sales tax
which is applied to the wholesale price of gaso-
line.
• Category: States where gas tax is indexed to
CPI/Wholesale Tax in Addition to Flat Excise
Tax
• Statute: Md. Tax – General §9–305
• Legislation: Transportation Infrastructure
Investment Act of 2013
• Date: July 1, 2013
• Frequency: Annual
• Limits: If there is a decline or no growth in
the CPI, the motor fuel tax does not change.
The excise tax rate has a ceiling of 8
percent of the previous year’s rate.
• Uses: Transportation
• Notes:
• If Congress fails to pass a federal Market-
place Fairness Act, or similar legislation to
allow states to require internet sellers to
collect sales tax, sales tax on gasoline will
increase another 2 percent effective Janu-
ary 1, 2016.
• Maryland Case Study available through
the Transportation Investment Advocacy
Center.
10. VARIABLE-RATESTATEGASTAXES
10
MICHIGAN NEBRASKA
Flat excise tax of 26.3 cents-per-gallon, indexed
to changes in inflation as reported by the Con-
sumer Price Index beginning Jan. 1, 2022. In-
creases are capped at 5 percent per year. An
additional 6 percent general sales tax on motor
fuel purchases is included.
• Category: Indexed to the Consumer Price
Index
• Statute: Mich. Comp. Laws § 205.75
• Limits: None found.
• Uses:
• Motor fuel tax and indexing distributing to
the Michigan Transportation Fund.
• Additional taxes: 0.875 cent-per-gallon for
environmental regulation fee for refined
petroleum fund.
Three components to the state gas tax—variable,
fixed, and wholesale. Gas tax includes a 16.3
cents-per-gallon flat excise tax (increased May
2015, fully implemented January 2019); a 5 per-
cent tax on the average wholesale price of fuel
(charged to producers, suppliers, distributors,
wholesalers, importers and retailers of motor
fuels); and a variable rate tax which is increased
as needed by the state legislature to ensure ad-
equate funding for transportation projects.
• Category: Wholesale Tax in Addition to Flat
Excise Tax
• Statute: Neb. Rev. Stat. §66-489.02 & Neb.
Rev. Stat. §66-4,144
• Date: July 1, 2009
• Frequency: Every six months.
• Limits: None found.
• Uses: Transportation
• All revenue generated from these taxes is
deposited into the state’s Highway Trust
Fund (66 percent of the Highway Cash Fund
for the Department of Roads; 17 percent to
counties via the Highway Allocation Fund
for road purposes; and 17 percent to
municipalities via the Highway Allocation
Fund for street purposes).
• Additional taxes:
• 0.9 cent-per-gallon release prevention fee
for gasoline; and
• 0.3 cent-per-gallon release prevention fee
for diesel and other fuels.
11. VARIABLE-RATESTATEGASTAXES
11
NEW YORK
Eight cents-per-gallon flat excise tax provides majority of transportation funds, with an additional state
sales tax of 4 percent (capped at 8 cents-per-gallon), and a petroleum business tax (PBT), imposed on
petroleum businesses operating within the state and passed on to consumers. PBT is equal to a base
rate of 7.2 percent of gross receipts from petroleum sales and is annually adjusted based off of inflation.
• Category: Wholesale Tax in Addition to Flat Excise Tax
• Statute: N.Y. TAX. LAW § 523 : NY Code - Section 523: Fuel use tax and N.Y. TAX. LAW § 301-j: NY
Code - Section 301-J: Supplemental petroleum business tax and supplemental tax on aviation
gasoline component of aviation fuel business tax
• Frequency: Annual
• Limits: Each January the rate change cannot be greater than 5 percent of the previous year’s rate.
• Uses:
• “Fuel Use Tax” (comprised of the flat excise tax and state sales tax) is deposited into the Dedi-
cated Highway and Bridge Trust Funds.
• Since April 2001, PBT revenues are divided among the Dedicated Highway and Bridge Trust
Funds, (which receives 50.6 percent), the Dedicated Mass Transportation Fund (29.7 percent)
and the mass Transportation Operating Assistance Fund (19.7 percent).
• Additional Taxes:
• 0.05 cent-per-gallon petroleum testing fee (gasoline only);
• Population-based state sales tax for Metropolitan Commuter Transportation District; and
• Local county sales tax.
As shown in the graph below, changes in New York’s gas prices reflects the trends in the U.S. average
price of gasoline.
Source: U.S. Energy Information Administration
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Florida
and
U.S.
Average
Weekly
Retail
Regular
Gasoline
Prices
1/3/2005-‐1/26/2015
U.S.
average
Florida
12. VARIABLE-RATESTATEGASTAXES
12
NORTH CAROLINA PENNSYLVANIA
Beginning January 2017, legislation signed into
law in 2015 will eliminate the current variable-
rate component. Instead, North Carolina’s state
gas tax will be calculated based on changes in
both the national Consumer Price Index (making
up 25 percent of the new tax) and in the state
population (making up 75 percent of the tax). The
base rate will be 34 cents-per-gallon.
• Category: Adjusts based on CPI and changes
in population (Beginning January 2017)
• Statute: N.C. §105-449.80. Tax rate & §105-
449.81
Legislation: Senate Bill 866 (1985)
• Date: Effective January 2017
• Frequency: Annual
• Limits: None
• Uses: Transportation
• 75 percent deposited in the Highway Fund
(general repair and maintenance of state
roads); and
• 25 percent deposited in the Highway Trust
Fund.
• Additional taxes: 0.25 cent-per-gallon
inspection tax
• Notes:
2013 law eliminated the state retail gas tax paid
at the pump and removed the capping process
on the Oil Company Franchise Tax (OCFT, calcu-
lated by the state Department of Revenue), which
was charged at the wholesale level. Uncapping
process will occur gradually—the rate was set
at $1.87 beginning January 2014, then increased
to $2.49 January 2015, and the OCFT cap will be
eliminated entirely January 2017.
• Category: Adjusts based on wholesale price
of gasoline (Beginning January 2017)
• Statute: Pa. Consolidated Statute Title 75
(Vehicle Code), Chapter 95
• Legislation: House Bill 1060
• Date: Effective January 2017
• Frequency: Annual
• Limits: Beginning in January 2017, a floor of
$2.99 will be put in place, preventing the tax
from collecting below that level.
• Uses: Highways
• Notes: Pennsylvania Case Study available
through the Transportation Investment
Advocacy Center.
13. VARIABLE-RATESTATEGASTAXES
13
RHODE ISLAND UTAH
33 cents-per-gallon flat excise tax on gasoline, in-
dexed to the Consumer Price Index for all Urban
Consumers (CPI-U).
• Category: Indexed to Consumer Price Index
• Statute: R.I. § 31-36-7
• Legislation: 2014—H 7133 (Budget Bill)
• Date: Effective July 1, 2015.
• Frequency: Bi-annual (every other year)
• Limits: Floor in place preventing generated
proceeds from falling below 2015 rates of 33
cents-per-gallon.
• Uses: Transportation
12 percent tax on the average wholesale price of
gasoline, to take effect once the average whole-
sale price of motor fuel reaches $2.45 per gallon.
• Category: Adjusts based on wholesale price
of gasoline (Beginning when the AWP reaches
$2.45 per gallon)
• Statute: Utah § 59-13-201
• Legislation: 2014 House Bill 562
• Frequency: Annually
• Limit: Once the average wholesale price of
motor fuel reaches $2.45 per gallon, the tax
cannot fall less than that amount (collecting
no less than 29 cents-per-gallon), and cannot
increase more than 40 cents-per-gallon.
• Uses: Transportation Fund
• Additional Taxes:
• County option sales and use tax.
14. VARIABLE-RATESTATEGASTAXES
14
VERMONT
State gas tax is comprised of a 12.1 cents-per-
gallon flat excise tax, a Motor Fuel Transportation
Infrastructure Assessment (MFTIA) of 2 percent
of the average quarterly retail gas price, and a
Motor Fuel Tax Assessment (MFTA) of 13.4 cents-
per-gallon or 4 percent of the tax-adjusted retail
gas price, (whichever is greater) upon each gallon
of motor fuel sold by the distributor, not to ex-
ceed 18 cents-per-gallon.
• Category: Wholesale Tax in Addition to Flat
Excise Tax
• Statute: Vt. Statute Title 23, Chapter 028,
Subchapter 001: § 3106 Imposition, rate, and
payment of tax
• Legislation: 2013 House 510 (Act 12)
• Frequency: Quarterly
• Limit: Base assessment on MFTA, floor of
$3.96 for MFTIA
• Uses: Transportation
• Additional Taxes:
• $0.01 petroleum clean up fee.
• Notes: Vermont Case Study available through
the Transportation Investment Advocacy
Center.
Legislation to put a floor on the MFTIA
proposed in 2015. Pending consideration
by the legislature at time of publication.
VIRGINIA
Rate of 5.1 percent of the average wholesale
price of gasoline.
• Category: Adjusts based on wholesale price
of gasoline
• Statute: Va. § 58.1-2217
• Legislation: House Bill 2313 (2013)
• Date: July 1, 2013
• Frequency: Annual
• Limits: A floor is set to prevent the tax from
collecting less than the average wholesale gas
and diesel price on Feb. 22, 2013.
• Uses: Transportation
• Additional taxes:
• 0.6 cent-per-gallon petroleum storage tank
fee; and
• 2.1 percent sales tax in certain locations.
• Notes: Virginia Case Study available through
the Transportation Investment Advocacy
Center.
15. VARIABLE-RATESTATEGASTAXES
15
WEST VIRGINIA
Flat tax gas tax of 20.5 cents-per-gallon plus 5
percent of the average wholesale gasoline price.
• Category: Wholesale Tax in Addition to Flat
Excise Tax
• Statute: W.V. §11-14C-5. Taxes levied; rate.
• Date: January 1, 2004
• Frequency: Annual
• Limits: Wholesale tax rate cannot fluctuate
more than 10 percent from the previous year,
or fall below $2.34 per gallon.
• Uses: State road fund.
